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California's Largest Restaurant Brokerage - Specializing in Sales, Acquisitions & Leasing of Restaurants, Bars, Clubs & Related Commercial Buildings

FAQs | Frequently Asked Questions

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BUYER FAQs

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I saw a listing and I 'd like to know the location and how to obtain more information?

When you find a listing that you are interested in on our website scroll down to the Request Confidential Information section and complete the form. Upon receipt, one of our team members will send you a link to sign a confidentiality agreement online via zoho sign. If you are new to our system you will be asked to complete our screening questions which are included on our confidentiality agreement. Once we have received your signed document, the location name & address will be emailed to you. If you have additional interest and would like to schedule a Back of House tour or if you would like to receive documents that we have on file, please send an email back to our team member who sent you the information and let them know.

What is normally included in the purchase price of the restaurant?

Minimally, the lease, equipment and liquor license (if the location has a liquor license). But it also depends on the profitability of the business. If a business is turning a profit and the seller does not own another location with the same name & concept, the name, menu, goodwill, equipment, lease and liquor license are included in a sale. If the business is marginally profitable or not turning a profit the lease, equipment and liquor license, if applicable, is included in the purchase price.

If I am purchasing the restaurant with all cash, why does it matter what my experience is?

Even when using all cash to purchase a business we need to get the approval of the landlord to complete the sale. Landlord’s prefer experienced operators and some have minimal net worth requirements for a new operator. In some cases, they want the prospective tenant to own real estate as well. If you don’t have any experience in the food service industry an experienced partner can be added to the lease to create a more desirable operator for the landlord.

How much money do I have to put down to buy a restaurant or food service business?

At least 20% of the purchase price when using a lender. An all cash offer would require 10% down or a minimum of $10,000. If the seller is willing to do seller carryback financing which is rare, there would need to be a significant amount of cash as part of the transaction.

If the space doesn't come with a liquor license, can I buy one separately?

It is possible, however each city/county is different in the total number of licenses that they have available depending on the population. We can help you determine if a stand alone liquor license is available in your area.

Can you find me a restaurant?

We recommend that you sign up for our e-newsletter, which contains a list and links to our new listings. This will be emailed to you on a weekly basis. You can sign up for our e-newsletter on our homepage using the Buyer Registration button or you can go to the Buy section of our website, located at the top of our homepage and register there. Our new listings are sorted by Northern and Southern California in the e-newsletter. Here is a link: https://www.restaurantrealty.com/buy-a-restaurant/

The space I'm looking at is a non-confidential listing, do I still need to sign a confidentiality agreement?

Yes, all spaces listed with RRC require a signed Confidentiality Agreement. You will have the ability to receive a copy of the lease and any financial documents that we have on file for the business that are confidential. You will also have the ability to take a back of the house tour once you sign the confidentiality agreement. You may also receive confidential information during a back of house tour.

I have already driven by a location and I'd like to tour the inside, how should I proceed?

Please kindly respond to our team member who originally sent you the location information and we’ll get you set up to tour the space as soon as possible. If this is for a non-confidential listing, please go to the Request Confidential Information section on the listing page, complete the form & once you have signed our Confidentiality Agreement let us know that you would like to schedule a tour.

Are detailed financials available for the listing I'm interested in?

Some restaurant owners have very detailed financials and some may not. We should at least minimally have a sales report available for potential buyers. The reason for this is that some locations are doing well and are turning a profit, while others are marginally profitable or not turning a profit at all. We can sell businesses that are not turning a profit because many have a desirable location, sought after equipment or lease terms.

I have already filled out an NDA with you, why do I need to fill out another for a different space?

These are legal documents and require each unique listing number on them with your signature for our records. We do have a version on our website where you can write in multiple listing #’s numbers on one NDA. Here is a link: https://www.restaurantrealty.com/confidentiality/

Can I buy a restaurant without any restaurant experience?

Not typically, it mainly depends on the willingness of the landlord. Landlords want experienced operators who will be able to hit the ground running without any issues that an inexperienced operator may have.  If you don’t have any experience, adding a partner that you know who has experience is ideal to make your concept more attractive to landlords. The other option would be to look for a Franchise opportunity. Most have excellent training programs. If we have any Franchises available for sale you can find them by looking at the top left side on our listings page on where you see All Property Types. Click on the drop-down arrow, scroll down to Franchises for Sale and then select the search button. You can also narrow this down by selecting a County as well.

The business I'm interested in says Price Negotiable. How do I know what a starting price point is?

Due to the Coronavirus pandemic and how greatly this has affected many of the businesses that we represent, we have found that using Price Negotiable gives us the opportunity to have a discussion about a business’s performance both before and during the pandemic with potential buyers. Many were performing at high levels and were profitable. Then with the restrictions, these businesses could not maintain the same level of profitability. Once a potential buyer has had the opportunity to learn the overall picture of the business, they will have a better idea of what they would like to offer for the business.

What happens when "under contract" or "in escrow?"

We market our listings until the escrow has closed. We do this because many deals fall out of contract prior to escrow closing and would therefore become available again. There are many different reasons why a deal may fall out of contract. When this happens, we notify anyone who has previously signed an NDA on the location letting them know that the business is available again.

What inspections are typically done by the buyer when purchasing a restaurant business?

Many counties have required Change of Ownership inspections with the local Health Department that a buyer would want to utilize to see if any upgrades or repairs would be needed to pass the final inspection. Buyers may also want to bring in a contractor if they would like to renovate a space. The amount of time given for these inspections is determined in the contingency section in an offer to purchase the business.

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SELLER FAQs

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What type of Businesses do you sell?

We sell all different types of food service industry businesses. Including but not limited to: Bakeries, Bars, Breweries, Café/Coffee Houses, Catering Businesses, Convenience Stores, Drive Thru Restaurants, Franchise Restaurants, Frozen Yogurt/Ice Cream Shops, Food Trucks, Fast Service/Grab & Go, Full-Service Restaurants, Juice Bars, Pizzeria’s, Nightclubs, etc. and Related Commercial Buildings.

Do you sell Real Estate?

Yes, we sell Commercial Buildings that are related to the Food Service Industry. These can be sold with or without an existing business.  Many of these types of properties are Mixed-Use properties and may have other Retail, Residential, Office, Industrial space and/or Undeveloped Land as part of the property.

Do I have to work exclusively with Restaurant Realty once I sign up with you?

Yes, our Representation Agreement is exclusive. If you choose to work with another agency at the same time, you would owe a commission to each agency that you have an active listing agreement with. We do not take on any listings that another agency is representing.

How long does your exclusive Representation Agreement run?

Our Representation agreements run for 6 months and has a 6 month roll over period. We structure them this way because we want to have you signed up for long enough to find you a qualified buyer and  get through the sales and escrow process. These transactions take time to complete. Breaking this into two, six (6) month periods gives you the option to end the agreement after the first six (6) months if you desire. You would send us a certified letter no later than thirty days before the initial expiration date of the representation agreement stating that you wish to terminate the listing after the initial listing expiration date expires. 

How much does it cost to sell my business with you?

Our commission is 10% of the final sales price of your business. Our minimum commission for any location that sells for under $100,000 ranges from $10,000 -$15,000.

If we don’t sell your business, there is no fee. We only collect a fee from you when we sell your business upon the close of escrow unless there is a violation of our representation agreement.

How do you come up with a Listing Price for my business?

We will prepare a Broker Opinion of Value on your business. We have two methods that we utilize.  For businesses that are profitable we use the Going Concern Method which is a multiple of Sellers Discretionary Earnings and other factors.  For businesses that are marginally profitable or not profitable, we utilize the Assets in Place Method which is based on our history of sales comps relating to the average sales price as a percent of the businesses sales. Your listing agent will provide you with a Broker Opinion of Value that you can review and discuss. If your business includes Real Estate, we do a separate valuation on the Real Estate and combine the two values to determine a listing price.

How do you find buyers for my business?

We use a combination of marketing methods to get the word out about your business for sale. One of our strongest tools is our current database of 60,000+ registered buyers that we can communicate with weekly through our weekly e-newsletter that advertises our new, featured and price reduced listings. Another major driver is our website, www.restaurantrealty.com, which has consistently received hundreds of thousands of visitors annually, generating millions of page views to our listings since going online in 1998. Restaurant Realty Company provides more comprehensive exposure on the Internet than any other restaurant brokerage in the country and we are constantly updating it to stay up with the most recent trends to maximize results for our clients.  We will also advertise your business on ten (10) additional Business for Sale websites.  We also purchase key words for paper click exposure in the major markets we service.  Additionally, we utilize the most sophisticated Search Engine Optimization (SEO) tools and advertise on major social media platforms including Linkedin, Facebook, Twitter and Instagram.

How do you keep my listing confidential?

We create a blind listing profile describing the general attributes of your business in detail without revealing the business location or any features that would give away your business identity.  We take confidentiality very seriously, consequently before a prospective buyer is given the name and address of your location, they must sign a confidentiality agreement and are screened regarding their operational and financial background. In some cases, a seller or landlord may have specific criteria that a buyer must meet before receiving any information about the business. In those cases, we will screen buyers to see if they meet the criteria and only if they do, then they will receive the information

Do you have any Non-Confidential Listings?

Yes, we do have a number of sellers that choose to sell with us on a non-confidential basis for our reach, professionalism and experience.  The listing profile will typically contain the business name and/or address. If a buyer would like to schedule a back of house tour or receive any documents on the business, we will have them sign a confidentiality agreement. We do this because they will receive information from us and/or the seller that is meant to be kept confidential.

I have a Liquor License that is part of my business, do you handle the transfer during the sale?

Yes, our agents will work with you and the buyer on completing all of the documents, submitting to the appropriate government agencies and will help guide you through any additional requests for documentation or issues that may come up with the different agencies involved. We are involved with the transfer of the liquor license until the transfer is complete and escrow has closed.

If my business is not located in California but I think that a buyer from California may be interested in purchasing my business, can you help find a buyer?

Restaurant Really is currently licensed in the State of California only and therefore we cannot represent a seller or buyer on a property or business located outside of California.

Can I list my business for sale on your website?

In order to list your food service business on our website we will connect you with one of our local agents who will visit your business, review the business financials and premises lease and complete a Broker Opinion of Value on your business. Then you will discuss and determine the listing price with them and once you have completed our listing paperwork, we will list your Business on our website, plus ten (10) additional Business for Sale websites.